(This may please be read in continuation of my earlier
article of November 13,2007, titled "Iran
to Fund Sri Lankan Arms Purchases")
President Mahmud Ahmadinejad of Iran is to visit Sri Lanka for two days
from April 28,2008, in response to an invitation from President Mahinda
Rajapaksa, who had visited Iran in November,2007. His engagements will
include the inauguration of the construction of the Iranian-funded ( US
$ 450 million) Uma Oya hydroelectricity project at Wellawaya in the
Monaragala district. When completed, the project is expected to produce
100 megawatts of electricity. The visit is also expected to result in
the finalisation of an agreement for Iranian financial and technical
assistance for enabling the Sapugaskanda oil refinery to handle Iranís
light crude. This project is expected to result in a further Iranian
investment of US $ one billion.
2. In this connection, quoting Sri Lankan media, the "Teheran Times" of
April 20,2008, reported as follows: "Iran will increase its investment
in the expansion project of an oil refinery in Sri Lanka up to US$ one
billion, Petroleum and Petroleum Resources Development Minister A.H.M.
Fowzie said. According to the IRNA office in Tokyo, Fowzie in an
interview with Kyodo on Wednesday said: "Iran's President Mahmoud
Ahmadinejad has allocated this amount which would cover 70 per cent of
the required investment for the refinery's expansion, in the form of a
10 year loan, with a five year exemption period from payment of the
loan's instalments." Fowzie added: "Iran had earlier too provided the
oil we need free from interest for four months."
According to the report, Iran is the largest provider of
crude oil to Sri Lanka. According to the Kyodo report, Managing Director
Ceylon Petroleum Corporation (CPC) Ashantha De Mel has said that the
pilot study for increasing the production of Sri Lanka's only refinery
from 50,000 to 100,000 barrels per day has been completed by Iranian oil
engineers. De Mel added: "Iran would make the major part of the required
investment for expansion of this oil refinery (70 per cent) and the CPC
would cover the rest (30 per cent)."
Fowzie said the project would yield noticeable benefits
for its investors. He said: "From the economic point of view my
affiliated ministry too is interested in making investments there."
According to Kyodo, De Mel who visited Iran in early April 2008, expects
the project's executive phase to begin within the next three to four
months. Oil experts predict that Sri Lanka's oil refinery would increase
its production after the Iranian oil engineers would end their work
within the next two to three years."
3. Iran has also agreed to provide low-interest credit to Sri Lanka to
enable it to purchase military equipment from Pakistan and China and to
train a small group of Sri Lankan Army and intelligence officers in
Iran. A team of about 10 officers has already proceeded to Iran for
training after a clandestine visit to Sri Lanka by Brigadier Gen. Qassem
Suleimani, the Director-General of Iranís Quds Force, or the Jerusalem
Brigade, which is, inter alia, responsible for covert actions against
Israel and for liaison with friendly foreign intelligence agencies. He
is expected to come again as a member of the entourage of the Iranian
President for further discussions on intelligence co-operation between
the two countries.
4.According to reliable sources, Israel is reported to have expressed to
Colombo its concern over the developing relations between Sri Lanka and
Iran and warned that this could come in the way of supply and sale of
Israeli military equipment to Sri Lanka in future. It has been reported
by these sources that Sri Lanka has already shared with the Iranian
intelligence copies of the instructions, training and maintenance
manuals of the Israeli equipment purchased by it in the past and allowed
some officers of the Quds Force to inspect the Israeli equipment.